US AIRWAYS is eliminating unprofitable routes and grounding 22 aircraft in what could be the first step towards shrinking the nation's sixth-largest airline to a regional carrier.
Stephen Wolf, the airline's chairman, has also warned that unless he has concessions from labour unions before 30 September, he will be forced to cancel a $14 billion order for up to 400 Airbus Industrie aircraft. The US Airways board says that, without a competitive cost structure, it will not approve the large capital expenditure necessary for growth.
The cuts, says Wolf, are part of a plan to ensure that US Airways "-has the strongest possible foundation as decisions are made about the ultimate strategic direction".
US Airways is ending jet-airliner services in September to nine cities, including Austin, Texas; Cincinnati, Ohio; and Daytona Beach and Melbourne in Florida. Turboprop services to those cities offered by US Airways Express, the carrier's regional-airline affiliate, are unaffected by the move. US Airways warns that other schedule changes are expected in the future. Overall capacity will be reduced by nearly 7% by mid-1997.
The route eliminations will lead to the grounding of five Fokker F28s and 17 of the carrier's oldest McDonnell Douglas DC-9s. US Airways does not say how many workers will lose their jobs. The US Air Line Pilots Association (ALPA), which represents the company's 5,000 pilots, says that 103 pilots will be sent on leave in the coming months.
Other cost-cutting moves include closure of the Los Angeles pilot and flight-attendant crew base by February 1998, with workers being transferred to other crew bases in the USA. Maintenance sites in Roanoke, Virginia, and Greensboro and Winston-Salem in North Carolina, will be phased out by the end of 1998. Two reservations centres will also be eliminated by 1 October.
"These steps are necessary whether the airline ultimately decides to move ahead on its hoped-for path to become a global competitor, or decides to become a regional airline," says Wolf.
Source: Flight International
